On December 11, 2025, Mexico published the General Water Law (“LGA”) and several amendments to the National Waters Law (“LAN”) in the Official Journal of the Federation. Although concession holders may still avoid the total or partial forfeiture of their water rights by paying a non-forfeiture guarantee fee, the new legal framework introduces significant changes that concession holders should carefully consider.
In the context of increasing water demand, regional water scarcity, and infrastructure constraints, Mexican authorities are seeking to exercise stricter oversight over the availability and actual use of water allocated under concessions. In particular, the new framework strengthens the government’s ability to recover concessioned water volumes that are not being used, exploited, or otherwise put to beneficial use by their holders.
Forfeiture of Concessioned Water Volumes
Under the National Waters Law (“LAN”), a water concession may be terminated, in whole or in part, if the concession holder fails, without legal justification, to exploit, use, or otherwise benefit from all or a portion of the concessioned national waters for two consecutive years.
However, the LAN allows concession holders to avoid total or partial forfeiture by paying a Non-Forfeiture Guarantee Fee (the “Guarantee Fee”). This payment must be made before the expiration of the applicable two-year period during which the concessioned water has not been exploited, used, or otherwise utilized, and may cover up to the full concessioned volume. The initial two-year period may be extended on up to two additional occasions, for a maximum total period of six years, provided that the concession holder submits a duly justified extension request to Mexico’s National Water Commission (“CONAGUA”). Approval of any extension remains subject to CONAGUA’s review and discretion.
Practical Implications for Concession Holders and Real Estate Projects
Accordingly, concession holders should periodically review the volumes of water they are actually using and compare them with the volumes authorized under their water concession titles. This review allows concession holders to identify the deadline for paying the Guarantee Fee, estimate the applicable amount, and develop an appropriate strategy for preserving their water rights whenever actual consumption is expected to remain below the concessioned volume, particularly after the first extension period.
Concession holders may also consider alternatives such as temporarily assigning unused water volumes to CONAGUA or implementing substantial operational improvements that increase water use within their industrial processes. However, each of these alternatives requires a case-by-case legal, technical, and operational assessment.
Mexico is currently considering a new regulation governing the calculation and payment of the Non-Forfeiture Guarantee Fee for national water rights. If enacted, the regulation could establish additional requirements or further clarify the procedures for calculating and paying the Guarantee Fee. Accordingly, stakeholders should closely monitor its publication and evaluate its potential impact.
Importance for the Real Estate Sector
Preserving water rights is particularly important for developers, property owners, operators, and agricultural or industrial users involved in real estate projects whose primary water supply depends on concessioned national waters in Mexico.
The recent amendments to the National Waters Law expanded CONAGUA’s enforcement authority, broaden the circumstances that may constitute non-compliance, and strengthened the applicable sanctions regime. As a result, concession holders should periodically assess their compliance with the obligations established under their water concession titles and applicable Mexican law in order to mitigate the risk of losing valuable water rights, facing operational disruptions, or becoming subject to administrative penalties.